By Bob Aston
Value chain analysis and development
can be a significant tool for poverty reduction, particularly for smallholder
farmers. It offers an opportunity to expand the financing opportunities for
agriculture, improve efficiency and repayments in financing, and consolidate
value chain linkages among participants in the chain. This provides a great
opportunity for smallholder farmers to improve their livelihood.
In a global economy, livelihoods are
no longer simply dependent upon what one produces, but also how that production
fits with competitive chains in the market system.
 |
| Farmers planting |
Diversification of activities among
multiple chains is noted as important to both farmers, agro-processors and
traders to reduce not only product and market risks but also to level
seasonality requirements for labour, equipment and capital.
The potential for smallholders to
effectively participate in high-value markets for agricultural and forest
products and strengthen their overall livelihood resilience depends heavily on
access to the right combination of assets, in sufficient quantities, at the
right time.
Similarly, local enterprises that
have direct business relations with smallholders require a minimum level of
asset endowments to evolve into viable operations and respond to the demands of
buyers and raw material suppliers.
The value chain approach can be
instrumentalised to promote inclusive economic growth as it allows the
identification of specific leverage points along a chain, reducing the average
cost per unit by increasing the number of units produced,
High diversity provides potential for
economies of scope through diversified but interlinked activities. This will
increase cost efficiency by producing two or more different products together
rather than separately.
Value chain development and its financing
can be integrated into a comprehensive livelihood model. For smallholder
farmers this can be an important aspect in ensuring sustainable and profitable
farming.
Diversification puts producers in a
more sustainable position by reducing market and production risks. It also permits them to maximize resources
and activities on a year-a-round basis, thus incrementing their income,
reducing fixed costs and providing continuous employment.
Overdependence on a particular chain
can be detrimental if not hedged or diversified adequately.
 |
| Farmer admiring her crops |
In the case of Laikipia County a lot
of emphasis has been laid on maize and dairy value chain. Though this is a good
approach as most farmers are growing maize, it has also seen the neglect of
tomato and cabbage value chain. Farmers particularly from Wangwaci area of
Sipili Division are not reaping maximum benefits from their tomatoes and
cabbages. This indicates that there is need to diversify into tomato and
cabbage value chain.
In order to improve livelihood of
smallholder farmers various value chain players need to address various
interventions that include; crop risk mitigation, post harvest handling,
warehouse receipts linked to loans, local value addition, linkages to markets,
aggregation and value chain linkages.
The diversity of activities and
services used in one value chain are often applied to multiple chains within a farm
in order to reduce overdependence on one chain.
Poor households normally tend to
integrate their production patterns into value chains either by diversifying
into new commercial agricultural activities or by specializing and intensifying
their production and gaining more agricultural income.
It is clear that different measures
are needed in each stage of value chain finance to achieve poverty reduction
among the most vulnerable.
No comments:
Post a Comment